Jan 10, 2006 — In an update on its Court-supervised restructuring process, Stelco Inc. indicated that election forms have now been delivered to all affected creditors. Under the restructuring plan, each affected creditor may elect to receive all or any part of its distribution from the cash pool in new common shares, subject to an overall limit on the number of new common shares that creditors collectively can elect to receive. Affected creditors that do not so elect will receive their entire distribution from the cash pool in cash.

Stelco also confirmed that the Court will consider the restructuring plan approved on December 9, 2005 at a sanction hearing on January 17, 2006. At that time, the Court will also hear an application by certain existing shareholders seeking the sale of the entire Stelco enterprise as a going concern. Stelco does not believe that such a course would be in the best interests of the company and its stakeholders.

The company also reported on the continuing process of identifying a new board of directors. The company's agreement with the three significant equity holders provides that the new board will consist of four directors to be named by Tricap Management Limited, one director to be named by each of Sunrise Partners Limited Partnership and Appaloosa Management LP, and the remaining three directors to be satisfactory to the three significant equity holders as a group. It is expected that the composition of the new board will be announced shortly before the date of the sanction hearing.

Stelco also announced that the three significant equity holders, who together will hold a majority of shares in the company upon completion of the restructuring, have indicated their desire that Courtney Pratt, the current CEO, be named Chairman of the new board of directors, and that the company seek a new chief executive officer. Any such changes are dependent upon plan implementation, which is currently scheduled for the end of February 2006.

Stelco Inc. is a large, diversified steel producer involved in major segments of the steel industry through its integrated steel business, minimills, and manufactured products businesses.